All Merchants Required to Accept Card Payments

Photo: Card Terminal and Bank Notes

A new regulation mandates all businesses registered in the Trade Registry, including small stores and individual entrepreneurs, to accept at least one form of non-cash payment method as of June 16, 2024, driven by the implementation of Law 406/2023, enacted on December 19, 2023.

This legislative move is designed to promote financial inclusion and accelerate the adoption of modern payment infrastructure throughout the nation.

Key Details of the Legislation

Law 406/2023 requires every registered business to facilitate and accept non-cash payment options. This initiative is aimed at fostering a safer, more efficient economic environment by leveraging modern payment technologies.

One notable aspect of the law allows for cash withdrawals at payment terminals. However, it’s crucial to understand that not all businesses will necessarily offer this service immediately. The availability of cash advances, up to 500 lei, is contingent upon the merchant's agreement with their payment service provider and the technical capabilities of their payment systems. Merchants who do offer this service are required to display signs clearly indicating its availability and any fees associated, which are capped at 1% of the withdrawal amount. These transactions are treated similarly to ATM withdrawals.

The transition to mandatory non-cash payments poses initial challenges, particularly for smaller retailers, due to the required operational and financial adjustments. Implementing card payment systems involves logistical changes and upfront costs. Nevertheless, this shift promises long-term benefits, including reduced cash handling risks and enhanced transaction efficiency.

The mandatory acceptance of non-cash payment methods under Law 406/2023 extends to all sectors, including taxi services. Despite the legal requirement, there is a notable concern regarding taxi drivers who, although equipped with card payment machines, frequently report these devices as ‘not working’—a practice that not only frustrates passengers.

Public and Merchant Responses

The mandate for universal card payment acceptance has elicited mixed reactions. While many consumers welcome the added convenience and security, some merchants are concerned about the implications of adapting their payment systems. The government and financial institutions are expected to facilitate the transition by providing support, possibly including subsidies or cost-effective solutions for necessary equipment.

This legislative shift marks a critical advancement in Romania’s financial infrastructure, aiming to cultivate a more inclusive and digitally enabled economy. As the country reduces its dependence on cash, both businesses and consumers will likely reap the benefits of a more secure and streamlined financial environment.

This move towards mandatory non-cash payments is a progressive step for Romania, reflecting broader global trends towards digital financial services and economic inclusivity. As implementation progresses, the adaptability of businesses and the continued support from financial entities will be key to achieving the intended benefits of the law.

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